Dividend reinvestment stock basis
Reinvestment of dividends works just like a new purchase of stock shares. The only real difference is the purchase happens automatically. By referencing the amount of dividends invested and the total number of shares purchased, you can calculate the cost basis of the stocks purchased through the reinvestment plan. Dividend reinvesting does affect the cost basis of your holdings, but it shouldn't be seen as a kind of partial refund of your original purchase. If you invest $10,000 in a dividend paying stock that generates $300 in dividends after one year (a 3% yield), just because you reinvest that income doesn't mean that your cost basis has been reduced to $9700.